Chain smokers may survive for 30 years, F&O traders die sooner: Vijay Kedia

Vijay Kedia founder, Kedia Securities Pvt. Ltd. (Photo: @VijayKedia1/X)
Vijay Kedia founder, Kedia Securities Pvt. Ltd. (Photo: @VijayKedia1/X)


For the ace investor, making music videos isn't just a hobby; he uses them to emphasize investing the right way, with a healthy degree of caution. With 90% equities in his portfolio, he focuses on small- and mid-caps and real estate for passive income.

Open your eyes bro, open your mind bro

Nine out of 10 traders, losing their money bro

Looks like a simple puzzle, but not at all so

No one could solve it ever, it's a fact you should know

Treat market as a business, not like a casino

Long-term investing is the only way to grow.

Thus goes the lyrics of a music video on YouTube with a simple message asking people to be cautious about their investment methods. The messenger, and singer, is none other than ace investor Vijay Kedia, who also wrote the lyrics and acted in it.

This music video is his seventeenth, and like all the ones before it, is dedicated to the stock market. Unlike his passion for investments, the music videos are a hobby— something that he does during his leisure time and aimed at disseminating his learning of the markets over the past 30 years.

The response to the videos have been good, says Kedia, but he readily admits that people rarely follow his advice. For instance, last month, Kedia says he met a fan at the Mumbai airport who claimed to love his latest song but soon began seeking tips about the futures market. “Nobody listens," he adds with a chuckle.

Related video: Ace investor Vijay Kedia's big statement on market outlook and why he advises against F&O trading

Kedia, the founder of investment firm Kedia Securities Pvt. Ltd, is also the largest shareholder in several listed Indian companies. While that shows his faith in Indian entities, he recently entered the international markets, buying stocks of Alphabet (Google) and MakeMyTrip. He claims that he invested in these firms just for fun.

Graphic: Pranay Bhardwaj
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Graphic: Pranay Bhardwaj

While he did not specify the quantum of investment in these stocks, RBI guidelines stipulate that investments of only up to $250,000 can be made on overseas stocks in a financial year.“ I did it for fun and not because of rupee depreciation or anything like that," Kedia said in an interaction with Mint for the guru portfolio series. In this series, leaders in the financial services industry share how they are handling their finances and investments. Edited excerpts:

What’s your current asset mix?

Not much has changed since the last time we spoke. I have roughly 90% of equities and 2-3% gold and silver in my portfolio. I have real estate apart from the house I’m currently living in. So that would form roughly 8% of my total portfolio. So, yes, a huge chunk of my portfolio is still in the stock market.

As for equities, I have almost always invested mostly in small-caps and mid-caps. I don’t understand Sebi’s classification of small and mid-caps, but I bet on small or mid-size companies that have a huge runway. I have been investing in real estate since about 20 years ago.

In every bull market, I take some money out of stocks and buy real estate. The idea is to create a passive income as I don’t want to be dependent on the stock market for regular income.

I want to remain free even when the market falls. Since I can sustain my lifestyle from the rental income alone, I can keep investing in stocks whenever I get dividends or take out money from stocks. I put a small part of my portfolio into gold and silver just for the sake of diversifying.

How did your portfolio perform in the past year?

Everybody is a genius in a bull market. Needless to say, my portfolio has also performed well. Although I didn’t have a hand in it and it was the markets that did the magic. I haven’t calculated the exact number, but it must be up 30%. My calculation could be wrong.

I don’t do all these calculations. I think all these things are imaginary as it’s digital money. I get to know more about my portfolio through the media because that information often gets leaked somehow.

Have you tried international equities?

The last time I spoke to Mint, 15 months ago, I was thinking of investing in overseas stocks. About a year back I invested in Alphabet Inc. which owns Google. Also, six months back I bought Makemytrip on Nasdaq exchange.

So these are two stocks I now have in my international portfolio. I did it for fun and not because of rupee depreciation or anything like that. As per RBI’s liberalized remittance scheme, I can invest only $250,000 per year which is a small sum. I may invest more now since it’s April (the beginning of a new financial year).

What about cash?

I’ve never had any cash in my bank account and invested whatever I had. In some instances, when I have a foreseeable major expense happening in the next two to three months, I keep aside that much cash in advance. Otherwise, I’m the enemy of cash. I lose sleep when I have cash in my bank account. 

When I spot a promising stock, I go all in and don’t leave any cash. That gives me happiness that I’ve invested everything. Another thing is that whatever I buy, the information gets leaked somehow or the other. I don’t know whether it is the broker or somebody else leaking this information. That’s a problem. I try to buy everything in 1 or 2 days and get over with it even if the stock is touching a higher circuit.

The markets are at all-time highs, and the SME (small and medium enterprises) space is also booming. Many are taking advice from the internet. Any advice for them?

Don’t take history lessons from a geography teacher. If you want to follow someone, then follow one who has been in the markets for over 20 to 30 years. If you make a newcomer your guru, then you’ve lost the game from the start. They are themselves newcomers in the market and earning money teaching others, so beware of them. 

Secondly, think of the stock market as a business. Market rewards you as per your perception, if you treat it as gambling, then it will prove a gamble for you. You cannot become a crorepati overnight. It’s a long-term game.

Sebi indicated there’s froth in the small and mid-cap space. What’s your take?

Firstly, it’s not true that there’s froth in all small- and mid-cap stocks. There must be about 5,000 mid and small-cap stocks. But I agree that there’s a froth in most pockets. When the market took a big hit last month, many mid-cap and small-cap companies fell much more. 

Personally, many of my portfolio stocks have seen more drawdowns, even 30%. We will see more such speed bumps going forward. New entrants in the markets are creating such movements and there’s no reason to be scared of it. It’s just that you need to pick the right stocks. 

Choose companies whose fundamentals are good and are not manipulated by operators. I am not worried about this fall because this is part and parcel of investing in the stock market.

Sebi is stress-testing small and mid-cap funds. How liquid is your portfolio since you mostly have small and mid-cap stocks?

I don’t want to take any stress by doing a stress test. I am like Abhimanyu from Mahabharat. He only knows how to enter (the chakravyuh) but doesn’t know how to exit it. My exit depends on the company and the market situation and not me. In fact, not having liquidity has worked in my favour. 

I cannot stay invested for long in large caps since those are very liquid in nature. Three months back, I thought the markets were about to fall and I would have sold if I had liquid large-cap stocks. To protect my portfolio from myself, I’m more comfortable staying invested in less liquid mid- and small-caps.

Any tips for new entrants in the market?

I would recommend them to start with mutual funds. Stock picking is not a game that you can learn by looking at others. It’s like a haircut. If you could learn by looking, then you would’ve learned to cut hair by now. But that’s not the case. You have to do it yourself, then only you’ll learn.

Any advice for F&O traders?

I don’t have anything to say. Only time will tell. I must have written at least 10 songs warning investors to stay away from all these short-term things. Nobody listens. I met somebody at the airport who said he loved my song ‘Open Your Eyes Bro, 9 out of 10 traders losing money bro.’ 

The next second he started asking for tips on the futures market. I folded my hands in front of him. To get to heaven, you have to die first. They will learn it the hard way. Making money is different but retaining money is another thing. People who benefited from F&O are mostly brokers only. “If you are smoking you may die in 20-30 years, if you are doing F&O, you might die the next day. Remember that!"

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